Commodity, industrial and technology shares had the biggest
gains among 10 groups in the S&P 500. Alcoa Inc., Caterpillar
Inc. and Apple Inc. advanced at least 1.1 percent. Ford Motor
Co. rallied 2.2 percent as deliveries of cars and light trucks
beat analysts’ estimates. Facebook Inc. climbed 1.4 percent as
General Motors Co. is said to be talking with the largest
social-networking company about resuming advertising.

The S&P 500 rose 0.6 percent to 1,374.02 at 1 p.m. New York
time. The Dow Jones Industrial Average added 72.43 points, or
0.6 percent, to 12,943.82. The Russell 2000 Index rallied 1.3
percent to 818.48. The market closed at 1 p.m. today, and will
be shut tomorrow for a holiday. Trading in S&P 500 companies was
almost in line with the 30-day average at this time of day.

“The factory orders report was a good surprise,” Richard
Sichel, who oversees $1.6 billion as chief investment officer at
Philadelphia Trust Co., said in a telephone interview.
“Investors are also finding comfort in central bank action. The
Fed has anticipated that they will do whatever it takes to not
let the economy slip, China is doing the same and that the
Europeans seem to be doing that too.”

Equities climbed as factory orders rose in May for the
first time in three months. Yet declining jobs data in the U.S.
this week may prompt the Federal Reserve to initiate fresh
stimulus, BNP Paribas SA said. The European Central Bank is
forecast to cut interest rates this week to help curb the debt
crisis, while a state-owned newspaper in China said the time is
ripe for a reduction in banks’ reserve-requirement ratios.

‘Tepid’ Recovery

The U.S. economy will grow by 2 percent this year and about
2.25 percent in 2013 amid a “tepid” recovery and the European
debt crisis, the International Monetary Fund said, lowering its
previous projections. In an April report, the IMF forecast U.S.
growth of 2.1 percent this year and 2.4 percent in 2013.

“Further easing” by the Federal Reserve might be needed
“if the situation was to deteriorate,” IMF Managing Director
Christine Lagarde said at a press conference in Washington
today. She said she welcomed previous actions by the Fed to help
the U.S. economy.

Concern about a global economic slowdown put the S&P 500
last month on the brink of a so-called correction, or a 10
percent decline from a recent peak. The index slumped 3.3
percent in the second-quarter, the biggest retreat since the
period ending in September.

Alcoa, Apple

The Morgan Stanley Cyclical Index of companies most-tied to
the economy rose 1.3 percent. Alcoa, the largest U.S. aluminum
producer, added 3.2 percent to $8.90. Caterpillar, the biggest
maker of construction equipment, advanced 3.3 percent to $86.46.
Apple, the biggest company by market value, gained 1.2 percent
to $599.41.

Car companies in the S&P 500 added 2.1 percent for the
second-biggest gain among 24 groups. General Motors, Ford and
Chrysler Group LLC said U.S. auto sales exceeded estimates in
June. Ford rallied 2.2 percent to $9.60. GM added 5.6 percent to
$20.67.

Facebook climbed 1.4 percent to $31.20. The talks were
reported by two people familiar with the matter. GM said it
would stop advertising on Facebook on the eve of the company’s
initial public offering in May.

MModal Inc. surged 8.4 percent to $14.02. The largest
provider of medical transcription services said it agreed to be
bought by a JPMorgan Chase & Co. unit for about $1.1 billion.

Navistar International Corp. rose 7.2 percent to $29.04
after the truckmaker scheduled an operations update for
investors this week that may include plans to drop one type of
pollution-control technology.

Duke Energy Corp. lost 1.7 percent to $68.69 after
unexpectedly announcing the resignation of Bill Johnson,
previously named to be the chief executive officer after its
takeover of Progress Energy Inc. James Rogers, the head of Duke,
is CEO of the merged companies effective immediately.

Johnson, 58, is resigning “by mutual agreement,” the
company said. The takeover, announced in January 2011, received
its final regulatory approval yesterday. Tom Williams, a
spokesman for Duke, declined to comment on the reason for the
change. Johnson has been the chairman and CEO of Raleigh, North
Carolina-based Progress since 2007.

Bearish Sentiment

Bearish sentiment in an individual investors’ survey has
surpassed the historical average for the longest stretch since
October, when stocks began a rally that lifted the S&P 500 24
percent.

A poll by the American Association of Individual Investors
showed 44.4 percent of respondents say U.S. stocks will fall
over the next six months. That’s the eighth week that pessimism
stayed above the 25-year average of 30 percent.

Concern Europe’s debt crisis will deepen and the recovery
weaken have erased as much as $1.8 trillion from U.S. equities
since March. The last time the proportion of bears topped the
average for this long was in the 14 weeks through Oct. 20, 2011,
just after the S&P 500 bottomed at 1,099.23. The benchmark
measure for U.S. stocks went on to surge as much as 29 percent,
reaching a four-year high of 1,419.04 on April 2.

“Individual investors tend to get in when the markets are
red hot and they tend to get out when the markets are at the
bottom,” said Robert Carey, who helps oversee $53 billion as
chief investment officer of Wheaton, Illinois-based First Trust
Portfolios.

Enough Speed

Gains that drove the S&P 500 to its biggest June advance
since 1999 may falter because too few stocks are rising with
enough speed, StockCharts.com Inc. said.

The gauge surged 2.5 percent on June 29, finishing the
month up 4 percent, amid optimism that Europe will prevent bank
losses from multiplying. While the rally drove 64 percent of
shares above their average price during the past 50 days, that’s
short of the 85 percent threshold that usually accompany longer
rallies, said Arthur Hill, a technical analyst at the firm.

While 85 percent is where momentum becomes self-sustaining,
equity declines are likely to speed up when the number of stocks
above the 50-day mean slips below 15 percent, Hill said.

“A surge above 85 percent shows strong-enough buying
pressure to suggest that an uptrend is emerging,” Hill wrote in
a note yesterday. “It is like a rocket lifting off the launch
pad. A strong up-thrust is needed to insure a sustainable
advance.”